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The Honolulu Advertiser
Posted on: Saturday, September 30, 2006

Kailua High hit for fiscal management

By Beverly Creamer
Advertiser Education Writer


Among the audit's findings:

  • Almost half of Kailua High's $2 million inventory "may be fictitious" as school staff do not have clear responsibility for oversight of the assets.

  • About $500,000 worth of equipment could not be located.

  • Teachers do not cooperate in keeping track of equipment, and that requirement is not enforced.

  • The administration of $200,000 in non-appropriated funds is casual.

  • Money raised for athletics is co-mingled with personal funds, and thousands of dollars collected for student activities are not deposited in a bank for days.

  • Monetary donations are recorded in unrestricted accounts rather than in trust accounts.

  • Coaches' salary funds were disguised for other athletic purposes, such as collecting gate receipts. Over the past five years, 15 people have been paid in this way.

  • Member selection criteria for the School Community Council should be changed to ensure greater independence.

    Source: State Office of the Auditor

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    In the first ever audit of a public school, state Auditor Marion Higa yesterday released a highly critical review of Kailua High School's fiscal management and raised concerns that the state's public school leaders may not be ready for the radical new demands of running a school today.

    In doing so, Higa pinpointed a growing worry among education officials over the comprehensive requirements of Act 51 the Reinventing Education Act of 2004 which put principals on performance contracts starting this school year and has greatly increased their responsibility for everything from spending to student test scores.

    "That's been the concern of many of us that schools are being asked to handle so much," said long-time Board of Education member Karen Knudsen.

    "We've been talking about needing business managers at the school level. There's too much we're sending down to the school level without proper supports in place."

    Randy Moore, the Department of Education's assistant superintendent for business services and former liaison for Act 51, agreed.

    "We have expectations of principals that are unrealistic," he said. "We don't give them adequate support because we don't have the resources to do it. We understand the challenges we have and, yes, we're committed to addressing them. But to snap your fingers and make it happen, the answer is no."


    While Higa noted that the findings at Kailua High cannot be extrapolated to all schools, the report said these deficiencies "suggest other Hawai'i schools may be similarly unprepared to shoulder the additional responsibility delegated by Act 51." And it called on the DOE to provide more tools and support.

    "The (Kailua) leaders struggle with the business aspects of running a school," notes the audit, "with the principal relying almost exclusively on clerical business office staff to manage its $10 million operations and $2 million inventory."

    As well, the audit notes a "casual" attitude about other school money and resources.

    Knudsen said this could also be an outcome of the added workload.

    "As folks are just trying to get the job done, they may be being creative in trying to do that and taking steps that aren't appropriate," she said.

    Higa further noted the Kailua principal has placed "low priority" on maintaining adequate financial records and accounting for the school's resources, and pointed to a "casual" attitude of managing the school's fundraising and its athletic programs.

    For instance, background checks of coaches have been lacking, said the audit, with some coaches hired and rehired and the season ending before background checks were completed or done at all.


    Kailua High Principal Francine Honda did not return Advertiser phone calls seeking comment. But in the official response to the audit, the DOE said it is committed to implementing the auditor's recommendations, noting that measures are planned or under way to strengthen the school's management as well as a commitment to offer all schools additional support.

    DOE spokesman Greg Knudsen said it would be "unfair" to make judgments about other schools in the system based on a single audit. However, he noted that "other schools can learn from these recommendations."

    "Every school might ask, 'If we were to undergo the same scrutiny, what might be found and how would we make improvements?' "

    Moore acknowledged that the department has recognized that the skill set for principals needs to be improved, so the DOE has provided administrative services assistants in every complex. They are intended to provide the financial expertise needed if principals are struggling.

    However, he acknowledged the department does need to do more training, even though in the two years since Act 51 was passed, it has launched training sessions to give principals the skills they need to take on additional responsibility for financial management of their schools.

    "People are not hired because of their interest or expertise in financial management," he said. "It's not historically high on any principal's list of things to worry about."

    As well, said Moore, the "historical culture" at public schools has been a certain amount of casualness about local school funds that are raised at the school level. It's not atypical for them to sit around in a drawer before they're put in the bank, he said.

    For their part, school principals have said they're stressed by the demands they face.

    Under the Reinventing Education Act, the DOE was required to make immense changes, including:

  • Transferring control of about 75 percent of each school's budget to the principal.

  • Requiring performance contracts for principals, which add sanctions for lack of student achievement.

  • Requiring lump-sum school budgeting based on student need under a new weighted formula. That means about half the schools will eventually lose money some hundreds of thousands of dollars which means positions will be cut and remaining staff will have additional demands.

    This is the first year of lump-sum budgeting and performance contracts, and while the flexibility implied in the new budgeting is a plus, there are worries about the changing workload.

    "Without question there's a realization that the job requirements and the job skills have changed quite a bit," said Kalaheo High Principal James Schlosser. "And although we are expected to be a curriculum leader and in classrooms, managing all this other stuff makes it very difficult to balance all that, as well as attend all the meetings we're mandated to attend."


    The audit also was critical of the school's athletic department and said the athletic director has hired coaches with criminal backgrounds, including one head coach who had a murder conviction. The name of the coach and the sport were not identified.

    Three people had been convicted of drunken driving and other lesser crimes, the audit stated. DOE officials at the district level later judged these people to be "of reputable and responsible character" and allowed them to continue coaching, the audit said.

    One assistant coach was allowed to work for more than a year before the athletic director discovered that he had been convicted of assault and domestic abuse, according to the audit. That coach eventually was fired.

    But Higa pointed out in the audit that the hiring practices at the school are so poor that the male coach with the murder conviction worked for three months before his criminal history was discovered. He eventually was fired as well.

    "The athletic director is disorganized and does not have a system in place to make sure coaching candidates' backgrounds are checked promptly ideally before they begin coaching," the audit said.

    Athletic director Mel Imai could not be reached for comment last night.

    In a response to the audit, schools superintendent Pat Hamamoto said the school has made improvements, including background checks of coaches.

    Curtis Lum contributed to this report.

    Reach Beverly Creamer at bcreamer@honoluluadvertiser.com.